Costly discrimination

Sex discrimination costs billions of pounds around the world. That's the message of this paper (pdf).

We find that for several countries a large fraction of the actual difference in output per capita between the U.S. and the different economies is due to gender inequality. For countries such as Ireland and Saudi Arabia, wage discrimination actually explains all of the output difference with the U.S.

It can explain around two-thirds of the difference in per capital income between Iran or Egypt and the US.
There are two reasons why gender discrimination is so expensive. One is simple maths. If women stay at home, they're not earning money. That depresses GDP per head. The other is that when women don't work, they have more children. And this spreads GDP over more people, again depressing per capital incomes.
This suggests that gender equality and economic development go hand-in-hand.

Comments

[Peter Risdon]

It suggests that gender equality and GDP go hand in hand, certainly. "Economic development" is a bit nebulous.

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So if no one had any children, we would all be richer?

[Katherine]

The third reason, which I hope is so obvious it barely needs to be said, is that if you restrict roughly 50% of the population you lose roughly 50% of the talent and abilities of the population.

[Matt Munro]

"So if no one had any children, we would all be richer?"

So why were houses a lot cheaper when fewer women worked and most had more children ?

"if you restrict roughly 50% of the population you lose roughly 50% of the talent and abilities of the population."

Only if "talent and ability" are evenly distributed across the population, which they obviously aren't.
Supposing the economy needs more qualified nurses, and supposing all the nurses are women, does that mean the health service is missing out on talent and ability ? Does it matter if the patients get the care they need ?

And if business still makes a matter ? What happens to the people displaced by women joining the workforce ?Has profitability increased with equality ?

[Andrew Duffin]

Gender-based wage discrimination explains all the difference in per-capita output between Saudi and the US?

To be blunt, I don't believe a word of it.

I expect the rest of the "study" to be equally rigorous.

[Chris]

It also shows why GDP is a poor measure. If a woman stays home and cook/clean/look after children instead of going to work as a cook and employing a cleaner and a child carer (who both do the same) then while there is an increase in economic output due to specilisation, it is not nearly as much of an increase as GDP measures would suggest.

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